I’m not in favour of the government’s plan to push the eligibility age for Old Age Security to 67 from 65.

The current system is sustainable. If changes are needed, the government can always expand the way it taxes back benefits for wealthier seniors.

The OAS doesn’t seem to be a major threat to Canada’s public finances, according to a recent paper by the C.D. Howe Institute.

The combined cost of OAS and GIS (guaranteed income supplement) is now 2.36 per cent of Canada’s gross domestic product. This is projected to rise to 3.16 per cent in 2030 and then fall to about 2.6 per cent in 2050.

By waiting until after age 65, you’ll get an enhanced monthly benefit of 0.6 per cent a month of deferral (or 7.2 per cent for a full year).

Once you receive your enhanced pension, you’ll get it for the rest of your life. The longer you live, the more you’ll benefit.

You can start taking advantage of the voluntary deferral in July 2013, assuming the legislation is passed.

The government gives two examples to show what happens to your pension if you wait to collect.

Michael, who turns 65 in September 2013, plans to work for another year. His annual benefit, starting at age 66, will be $6,948 instead of $6,481 (in 2012 dollars).

Rita, who turns 65 in December 2013, plans to work as long as she can. She opts for the maximum five-year deferral and will get an annual benefit, starting at age 70, of $8,814 instead of $6,481 (in 2012 dollars).

Voluntary deferral will be a permanent part of the system and will continue past 2023. That’s the year when the OAS pension will no longer be paid to Canadians at age 65.

“The deferral period will be gradually increased to ages 67 to 72, in parallel with the proposed age increases,” says Service Canada.

In another budget proposal, the government promises to streamline the way you get Old Age Security. Right now, you must fill out a lengthy application a few months before you’re eligible.

While still upset to see the OAS age limit rise by two years, I’m pleased to see the voluntary deferral of benefits and proactive enrolment in the budget. These two small changes will make the system work better for everyone.

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